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HomeMy WebLinkAboutPA2023-0121_20230703_PRELIMINARY TITLE REPORT CLTA Preliminary Report Form Order Number: O-SA-7003464 (Rev. 11/06) Page Number: 1 First American Title Page 1 of 15 First American Title Company 4 First American Way Santa Ana, CA 92707 California Department of Insurance License No. 151 Title Officer: Robert Davies Phone: (714)250-3577 Fax No.: (714)913-6388 E-Mail: fahq-ra-octitle2@firstam.com E-Mail Loan Documents to: Lenders please contact the Escrow Officer for email address for sending loan documents. Owner: Gallo of Corona Del Mar Inc Property: 3900 East Coast Highway Newport Beach, CA 92663 PRELIMINARY REPORT In response to the above referenced application for a policy of title insurance, this company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Exhibit A attached. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Exhibit A. Copies of the policy forms should be read. They are available from the office which issued this report. Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. Please be advised that any provision contained in this document, or in a document that is attached, linked or referenced in this document, that under applicable law illegally discriminates against a class of individuals based upon personal characteristics such as race, color, religion, sex, sexual orientation, gender identity, familial status, disability, national origin, or any other legally protected class, is illegal and unenforceable by law. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. Order Number: O-SA-7003464 Page Number: 2 First American Title Page 2 of 15 Dated as of June 15, 2023 at 7:30 A.M. The form of Policy of title insurance contemplated by this report is: To Be Determined A specific request should be made if another form or additional coverage is desired. Title to said estate or interest at the date hereof is vested in: Gallo of Corona Del Mar, Inc., a California Corporation, Subject to Item No. 17, 18, 19 and 20 The estate or interest in the land hereinafter described or referred to covered by this Report is: FEE The Land referred to herein is described as follows: (See attached Legal Description) At the date hereof exceptions to coverage in addition to the printed Exceptions and Exclusions in said policy form would be as follows: 1. General and special taxes and assessments for the fiscal year 2023-2024, a lien not yet due or payable. 2. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code. 3. Covenants, conditions, restrictions and easements in the document recorded March 17, 1925 in Book 569 of Deeds, Page 158 , but deleting any covenant, condition, or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, sexual orientation, familial status, disability, handicap, national origin, genetic information, gender, gender identity, gender expression, source of income (as defined in California Government Code § 12955(p)) or ancestry, to the extent such covenants, conditions or restrictions violation 42 U.S.C. § 3604(c) or California Government Code § 12955. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. Order Number: O-SA-7003464 Page Number: 3 First American Title Page 3 of 15 4. Covenants, conditions, restrictions and easements in the document recorded September 23, 1925 in Book 605 of Deeds, Page 242 , but deleting any covenant, condition, or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, sexual orientation, familial status, disability, handicap, national origin, genetic information, gender, gender identity, gender expression, source of income (as defined in California Government Code § 12955(p)) or ancestry, to the extent such covenants, conditions or restrictions violation 42 U.S.C. § 3604(c) or California Government Code § 12955. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. 5. An easement for either or both pole lines, conduits and incidental purposes, recorded March 16, 1927 as Book 24, Page 304 of Official Records. In Favor of: The Irvine Company Affects: as described therein The location of the easement cannot be determined from record information. 6. An easement for pipe line and incidental purposes, recorded November 5, 1954 as Book 2862, Page 218 of Official Records. In Favor of: Laguna Beach County Water District Affects: as described therein The location of the easement cannot be determined from record information. 7. The terms and provisions contained in the document entitled "Notice of Intent to Preserve Mineral Rights" recorded January 26, 1995 as Instrument No. 95-0034367 of Official Records. 8. Easements, Covenants and Conditions contained in the deed from Union Oil Company of California, a California corporation, dba Unocal, as Grantor, to Auto Spa of Corona Del Mar, Inc., a California corporation, as Grantee, recorded June 17, 1996 as Instrument No. 19960307210 of Official Records. Reference being made to the document for full particulars, but deleting any covenant, condition, or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, sexual orientation, familial status, disability, handicap, national origin, genetic information, gender, gender identity, gender expression, source of income (as defined in California Government Code § 12955(p)) or ancestry, to the extent such covenants, conditions or restrictions violation 42 U.S.C. § 3604(c) or California Government Code § 12955. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. 9. The terms and provisions contained in the document entitled "Agreement of Disclosure" recorded June 17, 1996 as Instrument No. 96-0307211 of Official Records. 10. An easement shown or dedicated on the Map as referred to in the legal description For: storm drain and incidental purposes. Order Number: O-SA-7003464 Page Number: 4 First American Title Page 4 of 15 11. A deed of trust to secure an original indebtedness of $9,600,000.00 recorded March 14, 2018 as Instrument No. 2018-89616 of Official Records. Dated: February 22, 2018 Trustor: Plaza Corona del Mar, Inc., a California corporation and Gallo of Corona Del Mar, Inc., a California corporation Trustee: Farmers and Merchants Trust Company of Long Beach, a California corporation Beneficiary: Farmers and Merchants Bank of Long Beach, a California corporation Affects: The land and other property. The above deed of trust states that it is a construction deed of trust. A document recorded August 25, 2020 as Instrument No. 2020-436254 of Official Records provides that the deed of trust or the obligation secured thereby has been modified. The effect of a document entitled "Full Reconveyance", recorded September 23, 2022 as Instrument No. 2022-314642 of Official Records. Note: The Company will require satisfactory proof of full payment of the debt secured by said mortgage or deed of trust prior to removing this exception or insuring the contemplated transaction. 12. Any statutory lien for labor or materials arising by reason of a work of improvement, as disclosed by a document recorded March 14, 2018 as Instrument No. 2018-89616 of Official Records. 13. An easement for underground communication facilities and incidental purposes, recorded May 2, 2018 as Instrument No. 2018000159929 of Official Records. In Favor of: Pacific Bell Telephone Company, a California corporation dba AT&T California Affects: as described therein The location of the easement cannot be determined from record information. 14. An easement for underground communication facilities and incidental purposes, recorded May 2, 2018 as Instrument No. 2018000159930 of Official Records. In Favor of: Pacific Bell Telephone Company, a California corporation dba AT&T California Affects: as described therein The location of the easement cannot be determined from record information. 15. An easement for underground electrical supply systems and communication systems and incidental purposes, recorded June 6, 2018 as Instrument No. 2018000206918 of Official Records. In Favor of: Southern California Edison Company, a corporation Affects: as described therein Order Number: O-SA-7003464 Page Number: 5 First American Title Page 5 of 15 16. The terms, provisions and easement(s) contained in the document entitled "Grant Of Easements And Mutual Benefit Agreement (Shared Parking Lot And Trash Enclosure)" recorded July 19, 2021 as Instrument No. 2021-461054 of Official Records. Document(s) declaring modifications thereof recorded April 19, 2022 as Instrument No. 2022-149458 of Official Records. 17. Prior to the issuance of any policy of title insurance, the Company will require: Evidence satisfactory to the Company that the deed executed by Gallo of Corona Del Mar Inc. to Eric Hanna recorded in October 07, 2021 on Instrument No. 2021-619240 is valid. Submit an affidavit from the grantor that the transfer was freely and fairly made with or without consideration; or execute a new deed. The affidavit must be signed and notarized using a Remote Online Notary (RON) facilitated by First American Title. To schedule the RON signing please provide the grantor(s) Full Name, phone number and email address. If you have questions, please contact your First American Escrow Officer or Title Officer. 18. Prior to the issuance of any policy of title insurance, the Company will require: Evidence satisfactory to the Company that the deed executed by Gallo of Corona Del Mar Inc. to Eric Hanna recorded in October 07, 2021 on Instrument No. 2021-619241 is valid. Submit an affidavit from the grantor that the transfer was freely and fairly made with or without consideration; or execute a new deed. The affidavit must be signed and notarized using a Remote Online Notary (RON) facilitated by First American Title. To schedule the RON signing please provide the grantor(s) Full Name, phone number and email address. If you have questions, please contact your First American Escrow Officer or Title Officer. 19. Prior to the issuance of any policy of title insurance, the Company will require: Evidence satisfactory to the Company that the deed executed by Eric Hanna to Gallo of Corona Del Mar Inc. recorded in November 01, 2021 on Instrument No. 2021-662332 is valid. Submit an affidavit from the grantor that the transfer was freely and fairly made with or without consideration; or execute a new deed. The affidavit must be signed and notarized using a Remote Online Notary (RON) facilitated by First American Title. To schedule the RON signing please provide the grantor(s) Full Name, phone number and email address. If you have questions, please contact your First American Escrow Officer or Title Officer. 20. Prior to the issuance of any policy of title insurance, the Company will require: Evidence satisfactory to the Company that the deed executed by Eric Hanna to Gallo of Corona Del Mar Inc. recorded in November 01, 2021 on Instrument No. 2021-662334 is valid. Submit an affidavit from the grantor that the transfer was freely and fairly made with or without consideration; or execute a new deed. The affidavit must be signed and notarized using a Remote Online Notary (RON) facilitated by First American Title. To schedule the RON signing please provide the grantor(s) Full Name, phone number and email address. If you have questions, please contact your First American Escrow Officer or Title Officer. 21. Any defects, liens, encumbrances or other matters which name parties with the same or similar names as Eric Hanna. The name search necessary to ascertain the existence of such matters has not been completed. In order to complete this preliminary report or commitment, we will require a statement of information. 22. Any right, title or interest of the spouse (if any) of Eric Hanna. Order Number: O-SA-7003464 Page Number: 6 First American Title Page 6 of 15 23. Any claim that the Title is subject to a trust or lien created under The Perishable Agricultural Commodities Act, 1930 (7 U.S.C. §§499a, et seq.) or the Packers and Stockyards Act (7 U.S.C. §§181 et seq.) or under similar state laws. Consideration for the deletion of this exception is highly fact intensive. Please contact the underwriter assigned to your file as soon as possible to discuss. 24. Water rights, claims or title to water, whether or not shown by the Public Records. 25. The new lender, if any, for this transaction may be a Non-Institutional Lender. If so, the Company will require the Deed of Trust to be signed before a First American approved notary. 26. WE FIND NO OPEN DEED OF TRUST. THE COMPANY WILL REQUIRE SATISFACTORY PROOF, PRIOR TO INSURING THE CONTEMPLATED TRANSACTION, THAT THE SUBJECT PROPERTY IS FREE FROM ANY ENCUMBRANCES. PLEASE PROVIDE THE FOLLOWING: A. AN AFFIDAVIT (Click Here), EXECUTED BY ALL THE SELLERS/BORROWERS STATING THAT THE PROPERTY IS FREE AND CLEAR, AND NOTARIZED IN FRONT OF A FIRST AMERICAN APPROVED NOTARY; B. THE OWNER STATEMENT FROM THE ESCROW INSTRUCTIONS; AND C. A WRITTEN STATEMENT FROM ESCROW CONFIRMING WHO THE PROCEEDS WILL BE DISBURSED TO. 27. Any facts, rights, interests or claims which would be disclosed by a correct ALTA/NSPS survey. 28. Rights of parties in possession. Prior to the issuance of a 2006 ALTA Extended Owner's Policy of Title without Western Regional Exceptions, The Company will require: 29. Furnish Plat of Survey of the subject property of recent date by a Registered Land Surveyor in accordance with the "Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys" which became effective February 23, 2016. Said Plat of survey shall include the required certification and, at a minimum, also have shown thereon Items 1, 8, 11, 16, 17, and 19 from Table A thereof. If zoning assurances are requested, Items 7(a), 7(b), 7(c) and 9 from Table A and information regarding the usage of the property must be included. NOTE: Exception may be made to any adverse matters disclosed by the ALTA/NSPS Land Title Survey. 30. With respect to Gallo of Corona Del Mar, Inc.: a. Evidence that the corporation is properly formed and in good standing in the state of its domicile. b. An official copy of the bylaws for the corporation. c. A copy of a resolution of the Board of Directors authorizing the contemplated transaction and designating which corporate officers shall have the power to execute on behalf of the corporation. d. Other requirements which the Company may impose following its review of the material required herein and other information which the Company may require. Order Number: O-SA-7003464 Page Number: 7 First American Title Page 7 of 15 31. A deed from the spouse (if any) of Eric Hanna be recorded in the public records, or the joinder of the spouse named herein on any conveyance, encumbrance or lease to be executed by said married person. The deed should contain the following statement: "It is the express intent of the grantor, being the spouse of the grantee, to convey all right, title and interest of the grantor, community or otherwise, in and to the herein described property to the grantee as his/her sole and separate property." The Company may impose other requirements following its review of the material required herein. Order Number: O-SA-7003464 Page Number: 8 First American Title Page 8 of 15 INFORMATIONAL NOTES Note: The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than the certain dollar amount set forth in any applicable arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. If you desire to review the terms of the policy, including any arbitration clause that may be included, contact the office that issued this Commitment or Report to obtain a sample of the policy jacket for the policy that is to be issued in connection with your transaction. 1. General and special taxes and assessments for the fiscal year 2022-2023. First Installment: $3,625.82, PAID Penalty: $0.00 Second Installment: $3,625.82, PAID Penalty: $0.00 Tax Rate Area: 07-001 A. P. No.: 459-123-42 2. According to the latest available equalized assessment roll in the office of the county tax assessor, there is located on the land a(n) Commercial Structure known as 3900 East Coast Highway, Newport Beach, California. 3. According to the public records, there has been no conveyance of the land within a period of twenty four months prior to the date of this report, except as follows: A document recorded October 07, 2021 as Instrument No. 2021-619240 of Official Records. From: Gallo of Corona Del Mar Inc. To: Eric Hanna A document recorded October 07, 2021 as Instrument No. 2021-619240 of Official Records. From: Gallo of Corona Del Mar Inc. To: Eric Hanna A document recorded November 01, 2021 as Instrument No. 2021-662332 of Official Records. From: Eric Hanna To: Gallo of Corona Del Mar Inc. A document recorded November 01, 2021 as Instrument No. 2021-662334 of Official Records. From: Eric Hanna To: Gallo of Corona Del Mar Inc. Order Number: O-SA-7003464 Page Number: 9 First American Title Page 9 of 15 4. It appears that a work of improvement is in progress or recently completed on the land. The Company will require various documents and information, including but not limited to a completed mechanics' lien risk analysis, construction contract(s), lien waivers, loan agreement, disbursement information, executed indemnity agreement and current financial information from proposed indemnitors, in order to determine whether mechanics' lien insurance can be issued. Other requirements may be made following the review of such documents and information. The map attached, if any, may or may not be a survey of the land depicted hereon. First American expressly disclaims any liability for loss or damage which may result from reliance on this map except to the extent coverage for such loss or damage is expressly provided by the terms and provisions of the title insurance policy, if any, to which this map is attached. Order Number: O-SA-7003464 Page Number: 10 First American Title Page 10 of 15 LEGAL DESCRIPTION Real property in the City of Newport Beach, County of Orange, State of California, described as follows: LOT 2 OF TRACT NO. 17386, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 963, PAGES 5 THROUGH 7 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 459-123-42 Order Number: O-SA-7003464 Page Number: 11 First American Title Page 11 of 15 Order Number: O-SA-7003464 Page Number: 12 First American Title Page 12 of 15 NOTICE Section 12413.1 of the California Insurance Code, effective January 1, 1990, requires that any title insurance company, underwritten title company, or controlled escrow company handling funds in an escrow or sub- escrow capacity, wait a specified number of days after depositing funds, before recording any documents in connection with the transaction or disbursing funds. This statute allows for funds deposited by wire transfer to be disbursed the same day as deposit. In the case of cashier's checks or certified checks, funds may be disbursed the next day after deposit. In order to avoid unnecessary delays of three to seven days, or more, please use wire transfer, cashier's checks, or certified checks whenever possible. Order Number: O-SA-7003464 Page Number: 13 First American Title Page 13 of 15 EXHIBIT A LIST OF PRINTED EXCEPTIONS AND EXCLUSIONS (BY POLICY TYPE) CLTA/ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE [(07-01-2021) v. 01.00] EXCLUSIONS FROM COVERAGE The following matters are excluded from the coverage of this policy and We will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. a. any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) that restricts, regulates, prohibits, or relates to: i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement on the Land; iii. the subdivision of land; or iv. environmental remediation or protection. b. any governmental forfeiture, police, or regulatory, or national security power. c. the effect of a violation or enforcement of any matter excluded under Exclusion 1.a. or 1.b. Exclusion 1 does not modify or limit the coverage provided under Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23, or 27. 2. Any power to take the Land by condemnation. Exclusion 2 does not modify or limit the coverage provided under Covered Risk 17. 3. Any defect, lien, encumbrance, adverse claim, or other matter: a. created, suffered, assumed, or agreed to by You; b. not Known to Us, not recorded in the Public Records at the Date of Policy, but Known to You and not disclosed in writing to Us by You prior to the date You became an Insured under this policy; c. resulting in no loss or damage to You; d. attaching or created subsequent to the Date of Policy (Exclusion 3.d. does not modify or limit the coverage provided under Covered Risk 5, 8.f., 25, 26, 27, 28, or 32); or e. resulting in loss or damage that would not have been sustained if You paid consideration sufficient to qualify You as a bona fide purchaser of the Title at the Date of Policy. 4. Lack of a right: a. to any land outside the area specifically described and referred to in Item 3 of Schedule A; and b. in any street, road, avenue, alley, lane, right-of-way, body of water, or waterway that abut the Land. Exclusion 4 does not modify or limit the coverage provided under Covered Risk 11 or 21. 5. The failure of Your existing structures, or any portion of Your existing structures, to have been constructed before, on, or after the Date of Policy in accordance with applicable building codes. Exclusion 5 does not modify or limit the coverage provided under Covered Risk 14 or 15. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights law, that the transfer of the Title to You is a: a. fraudulent conveyance or fraudulent transfer; b. voidable transfer under the Uniform Voidable Transactions Act; or c. preferential transfer: i. to the extent the instrument of transfer vesting the Title as shown in Schedule A is not a transfer made as a contemporaneous exchange for new value; or ii. for any other reason not stated in Covered Risk 30. 7. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 8. Negligence by a person or an entity exercising a right to extract or develop oil, gas, minerals, groundwater, or any other subsurface substance. 9. Any lien on Your Title for real estate taxes or assessments imposed or collected by a governmental authority that becomes due and payable after the Date of Policy. Exclusion 9 does not modify or limit the coverage provided under Covered Risk 8.a. or 27. 10. Any discrepancy in the quantity of the area, square footage, or acreage of the Land or of any improvement to the Land. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner’s Coverage Statement as follows: For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. The deductible amounts and maximum dollar limits shown on Schedule A are as follows: Your Deductible Amount Our Maximum Dollar Limit of Liability Covered Risk 16: 1% of Policy Amount Shown in Schedule A or $2,500 $10,000 (whichever is less) Covered Risk 18: 1% of Policy Amount Shown in Schedule A or $5,000 $25,000 (whichever is less) Covered Risk 19: 1% of Policy Amount Shown on Schedule A or $5,000 $25,000 (whichever is less) Covered Risk 21: 1% of Policy Amount Shown on Schedule A or $2,500 $5,000 (whichever is less) Order Number: O-SA-7003464 Page Number: 14 First American Title Page 14 of 15 ALTA OWNER'S POLICY [(07-01-2021) V. 01.00] CLTA STANDARD COVERAGE OWNER'S POLICY [(02-04-22) V. 01.00] EXCLUSIONS FROM COVERAGE The following matters are excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys’ fees, or expenses that arise by reason of: 1. a. any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) that restricts, regulates, prohibits, or relates to: i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement on the Land; iii. the subdivision of land; or iv. environmental remediation or protection. b. any governmental forfeiture, police, regulatory, or national security power. c. the effect of a violation or enforcement of any matter excluded under Exclusion 1.a. or 1.b. Exclusion 1 does not modify or limit the coverage provided under Covered Risk 5 or 6. 2. Any power of eminent domain. Exclusion 2 does not modify or limit the coverage provided under Covered Risk 7. 3. Any defect, lien, encumbrance, adverse claim, or other matter: a. created, suffered, assumed, or agreed to by the Insured Claimant; b. not Known to the Company, not recorded in the Public Records at the Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; c. resulting in no loss or damage to the Insured Claimant; d. attaching or created subsequent to the Date of Policy (Exclusion 3.d. does not modify or limit the coverage provided under Covered Risk 9 or 10); or e. resulting in loss or damage that would not have been sustained if consideration sufficient to qualify the Insured named in Schedule A as a bona fide purchaser had been given for the Title at the Date of Policy. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights law, that the transaction vesting the Title as shown in Schedule A is a: a. fraudulent conveyance or fraudulent transfer; b. voidable transfer under the Uniform Voidable Transactions Act; or c. preferential transfer: i. to the extent the instrument of transfer vesting the Title as shown in Schedule A is not a transfer made as a contemporaneous exchange for new value; or ii. for any other reason not stated in Covered Risk 9.b. 5. Any claim of a PACA-PSA Trust. Exclusion 5 does not modify or limit the coverage provided under Covered Risk 8. 6. Any lien on the Title for real estate taxes or assessments imposed or collected by a governmental authority that becomes due and payable after the Date of Policy. Exclusion 6 does not modify or limit the coverage provided under Covered Risk 2.b. 7. Any discrepancy in the quantity of the area, square footage, or acreage of the Land or of any improvement to the Land. NOTE: The 2021 ALTA Owner’s Policy may be issued to afford either Standard Coverage or Extended Coverage. In addition to variable exceptions such as taxes, easements, CC&R’s, etc., the Exceptions from Coverage in a Standard Coverage policy will also include the Western Regional Standard Coverage Exceptions listed below as numbers 1 through 7. The 2021 CLTA Standard Coverage Owner’s Policy will include the Western Regional Standard Coverage Exceptions listed below as numbers 1 through 7. EXCEPTIONS FROM COVERAGE Some historical land records contain Discriminatory Covenants that are illegal and unenforceable by law. This policy treats any Discriminatory Covenant in a document referenced in Schedule B as if each Discriminatory Covenant is redacted, repudiated, removed, and not republished or recirculated. Only the remaining provisions of the document are excepted from coverage. This policy does not insure against loss or damage and the Company will not pay costs, attorneys’ fees, or expenses resulting from the terms and conditions of any lease or easement identified in Schedule A, and the following matters: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material unless such lien is shown by the Public Records at Date of Policy. 7. Any claim to (a) ownership of or rights to minerals and similar substances, including but not limited to ores, metals, coal, lignite, oil, gas, Order Number: O-SA-7003464 Page Number: 15 First American Title Page 15 of 15 uranium, clay, rock, sand, and gravel located in, on, or under the Land or produced from the Land, whether such ownership or rights arise by lease, grant, exception, conveyance, reservation, or otherwise; and (b) any rights, privileges, immunities, rights of way, and easements associated therewith or appurtenant thereto, whether or not the interests or rights excepted in (a) or (b) appear in the Public Records or are shown in Schedule B. 2006 ALTA OWNER'S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as shown in Schedule A, is (a) a fraudulent conveyance or fraudulent transfer; or (b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. NOTE: The 2006 ALTA Owner’s Policy may be issued to afford either Standard Coverage or Extended Coverage. In addition to variable exceptions such as taxes, easements, CC&R’s, etc., the Exceptions from Coverage in a Standard Coverage policy will also include the Western Regional Standard Coverage Exceptions listed below as numbers 1 through 7. EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees or expenses, that arise by reason of: The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and that are not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material unless such lien is shown by the Public Records at Date of Policy. 7. Any claim to (a) ownership of or rights to minerals and similar substances, including but not limited to ores, metals, coal, lignite, oil, gas, uranium, clay, rock, sand, and gravel located in, on, or under the Land or produced from the Land, whether such ownership or rights arise by lease, grant, exception, conveyance, reservation, or otherwise; and (b) any rights, privileges, immunities, rights of way, and easements associated therewith or appurtenant thereto, whether or not the interests or rights excepted in (a) or (b) appear in the Public Records or are shown in Schedule B.